The Great Recession, Labor Market Segmentation and Immigrant Unemployment

• In Event: 3251 - Section on International Migration Refereed Roundtables (1 hour)
  In Refereed Roundtable 60min: 13. Labor Market Incorporation

Abstract

At the height of the Great Recession new immigration to the US plummeted. In keeping with conventional perspectives on immigrant incorporation into the secondary labor market, immigrant unemployment soared, return-migration increased, and for a brief period the number of foreign-born workers in the US labor force actually declined. But even before aggregate unemployment levels peaked, the market for foreign-born labor was on the rebound. What accounts for the resilience of immigrant labor? We use data on unemployed workers to assess explanations based on labor market segmentation, spatial mismatch, and access to the social safety net. We find that labor market segmentation and the allocation of foreign-born and native-born workers across the occupational structure can best account for the more rapid employment recovery among foreign-born workers. Among displaced workers in the hard-hit secondary sector, immigrants spent less time in unemployment than did native workers, while in the skilled sector displaced immigrants experienced longer and deeper unemployment than natives. There is little support for the spatial mismatch hypothesis, but we found that immigrant-native differences in re-employment rates are reinforced by differential access to the social safety net. Unemployed workers are less likely to receive unemployment insurance benefits if they are foreign-born, and job-seekers without benefits are under pressure to return to work quickly. As a result, immigrants were more likely than native-born workers to experience “scar effects” in the form of downwards occupational mobility after an unemployment spell.

Author

• Patricia A. McManus, Indiana University